\’Dude, no way, I don\’t want to go to jail\’ and more evidence from insider-trading case

An instant-message exchange presented as evidence in an insider trading complaint against two 30-somethings that doesn\’t do a thing to discourage the image of excited, puerile greed that characterizes so much of the public\’s current perception of Wall Street wheelers and dealers.

The complaint, which runs some 23 pages and outlines the evidence against Thomas Conradt and David Weishaus, contains the usual language of such documents familiar to reporters trudging through the legalese. It has all the \”thereunders\”, \”pursuant tos\” and cloaked references to other characters involved in the case but not named in the charging document.

The deal in question involved International Business Machines Corp.\’s ibm
acquisition of SPSS Inc.

The complaint alleges that a group of securities industry professionals participated in unlawful insider trading, and tipped off some friends about the deal to profit from the information.

It\’s all pretty standard stuff until page 11 of the complaint. That\’s where \”Brooks Brothers meets Beavis and Butthead\” character of the tale emerges in the form of a series of exchanges between our two players.

To set the scene, the feds allege that

In late May 2009, Conradt’s roommate, an Australian Equities Analyst at an international, registered broker-dealer (the “Source”), learned nonpublic, material information regarding the pending SPSS acquisition from his close friend (the “Associate”), an associate at a New York law firm (the “Law Firm”) who worked on the SPSS acquisition. The Source misappropriated the information from the Associate and purchased SPSS securities on the basis
of that information. He also tipped his roommate, Conradt, who also illegally traded in SPSS securities. Conradt, in turn, tipped Defendant Weishaus. The downstream tipping continued to, at least, three other registered representatives of the Broker (referenced herein as “RR1,” “RR2,” and “RR3”), each of whom worked with Conradt at the Broker’s New York City office. Ultimately, the trades placed by Conradt, Weishaus, and the three registered representatives, resulted in ill-gotten gains exceeding $1 million.

In July of 2009, the pair, much to the convenience of prosecutors, conducted a colorful and damning series of messages now ensconsed for posterity in the charging document.

The tale of the tape begins July 1, 2009…

Weishaus: somebody is buying spss 8000 shares traded hit 34

And, the discussion goes on from there

Weishaus: we should get [RR3] to buy a f***loadConradt: jesus don’t tell anyone elseWeishaus: like, [RR3] buy 100000 shares
Conradt we gotta keep this in the family Weishaus: dude, no way i don’t want to go to jail f*** thatConradt: jesus christ Weishaus: martha stewart spent 5 months in the slammerConradt: does [a friend] know? Weishaus: and they tried to f*** the mavericks owner

Then, the feds allege that in the following exchange “Conradt confirmed the Source as the source of the material, nonpublic inside information on SPSS: ,”

Weishaus:we need some turn around on spssConradt: yeah i called [the Source], gonna get more details tonight he was at work, couldn’t talk

Both Conradt and Weishaus, it’s alleged, then attempted to or did increase their investments in options that would pay off handsomely when the deal was completed, prompting the following exchange:

Conradt: f*** it i’m sending you another grand i want in on these options i am amazed brokerage firm] is letting me buy on marginWeishaus: dude, f*** that Send it ot [sic] [brokerage firm] Youre [sic] gonna stick me with the taxes

By this point, the duo seem to fully aware of what they’re doing but also so caught up in the excitement that there’s no turning back.

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